Santander UK sees profits more than double

28 October 2009 | By Natalie Thomas

Profit across the UK brands is up 58% compared to the same time last year.

Loans grew by 43% and deposits increased by 46% in sterling following the integration of A&L.

The company says its performance reflects the positive contribution of B&B and A&L, as together both brands contributed £219m to the group’s UK profit.

Excluding their results, Santander UK’s was up 28% on the corresponding period last year.

Overall Santander’s group profit of €2.22bn in Q3 was broadly level with that of last year, just 0.7% more than seen in Q3 2008.

Profit for the first nine months at the Spanish banking giant was €6.74bn, 2.8% lower than in the same period in 2008.

Santander acquired Abbey in 2004, the deposits and branch network of B&B in September 2008, and A&L in October 2008.

The brands will transfer to the Santander brand during next year, creating a Santander UK branch network of over 1300.

The group says that the three brands are an “integral part of the growth strategy in the UK and speed up the goal of making Santander UK a universal retail bank.”

Across the UK businesses Santander is operating on a loans to deposits ratio of 128%, down from 143% in Q3 2008.

Santander says its UK mortgage book doesn’t have any exposure to either self-cert or sub-prime mortgages, and has only 1% of its portfolio in buy-to-let loans.

Gross income for the UK brands grew 65.4%, partly due to “the continued focus on spreads on new and existing mortgages.”

Abbey’s market share of gross mortgage lending in the first nine months was 14.6%, and 18% including A&L.

Santander says its focus continues to be on the quality of new lending based on LTVs.

The average LTV in new loans has remained virtually flat at around 60% in the last three quarters, while in the LTV of existing stock remained at 53%.

Deposits were 19% higher than in September 2008 and factoring in A&L and B&B, balances increased 44%.